In the fast-evolving landscape of artificial intelligence, where billions in venture capital often dictate success, one Chinese startup stands out for its unconventional funding model.
DeepSeek, the Hangzhou-based AI lab renowned for its cost-effective large language models (LLMs), owes much of its momentum to an unlikely ally: a high-performing quantitative hedge fund owned by its founder, Liang Wenfeng.
As of early 2026, Zhejiang High-Flyer Asset Management has emerged as a financial juggernaut, posting stellar returns that could provide DeepSeek with a stable, internal "war chest" for scaling AI without relying on external investors.
The Man Behind the Machines: Liang Wenfeng's Dual Empire
Liang Wenfeng, often described in industry circles as a "nerdy guy with a terrible hairstyle," has built an impressive dual career in finance and technology. He founded High-Flyer in 2016, initially as Ningbo High-Flyer Quant Investment Management Partnership, with subsidiaries including Zhejiang High-Flyer Asset Management Co., Ltd. By December 2025, the firm managed over 70 billion yuan (approximately $10 billion USD), overseeing more than 450 investment products, primarily index funds. High-Flyer halted external fundraising years ago, allowing Liang, who retains a majority stake, to direct profits internally.
In 2023, High-Flyer incubated DeepSeek, channeling its quantitative expertise into AI development. DeepSeek quickly gained global attention for models like DeepSeek-V2, trained on budgets under $6 million — dramatically lower than the $100 million-plus reportedly spent by OpenAI on GPT-4.
This efficiency, achieved amid U.S. chip sanctions limiting access to advanced hardware, has positioned DeepSeek as a formidable competitor to Western giants like OpenAI, Google, and Anthropic. Notably, DeepSeek's breakthroughs have even triggered market ripples, such as a $600 billion drop in Nvidia's market cap in a single day following one of its announcements.
A Phenomenal 2025: High-Flyer's Record-Breaking Performance
2025 was a banner year for High-Flyer, with an average return of 56.6% across its funds, according to data from Shenzhen PaiPaiWang Investment & Management. This placed the firm second among Chinese quant hedge funds managing over 10 billion yuan ($1.43 billion), just behind Ningbo Lingjun Investment Management, which achieved 70-73.5% returns.
High-Flyer's shift in 2024 from market-neutral strategies to long-only bets — focusing on buying stocks in anticipation of growth — paid off handsomely amid a favorable market for systematic trading.
This performance wasn't an outlier; it reflected a broader boom in China's quant sector. Chinese quantitative funds averaged 30.5% returns in 2025, more than double the global average for peers. Long-only quant strategies fared even better, averaging 35%. For High-Flyer, these gains translate to substantial revenue.
Under a standard fee structure of 1% management fees plus 20% performance fees, the fund could have generated over $700 million in 2025 alone. With Liang as the majority owner, much of this capital remains under his control, providing a direct pipeline to DeepSeek's operations.
Fueling AI Growth: From Profits to Processors
The implications for DeepSeek are profound. In an industry where scaling LLMs demands massive investments in talent, GPUs, servers, and data centers, High-Flyer's profits offer a "hidden source of financing" that bypasses traditional venture rounds.
This self-sustaining model allows DeepSeek to allocate resources efficiently: competitive salaries for top engineers, procurement of computing hardware despite sanctions, and rapid iteration on models without investor pressure.
Consider the contrast: While U.S. AI firms burn through billions in funding, DeepSeek's frugal approach —leveraging High-Flyer's R&D budget — has enabled breakthroughs at a fraction of the cost. As Liang himself has emphasized, this setup ensures China doesn't cede AI leadership to the West. With High-Flyer's 160 employees (as of 2021) and quant expertise informing AI strategies, the synergy creates a rare competitive edge.
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A Broader Trend: China's Quant Boom and AI Ambitions
High-Flyer's success mirrors China's rising dominance in quantitative finance, where domestic funds outperformed global competitors by leveraging data-driven strategies in a volatile market. When multiple top quant funds deliver 50-70% returns in a single year, it signals systemic strength rather than luck. For DeepSeek, this means reliable funding streams, potentially accelerating releases like future iterations of its models, which have already disrupted markets and challenged assumptions about AI development costs.
In a world where AI innovation often hinges on Silicon Valley's venture ecosystem, DeepSeek's hedge-fund-backed model offers a compelling alternative. As 2026 unfolds, Liang Wenfeng's intertwined empires could redefine how startups scale, proving that sometimes the most powerful AI tools are forged not just in code, but in clever financial engineering.
